Smart Ways to Avoid Credit Card Fees

Avoid credit card fees! Follow these tips!

Credit card fees refer to the different charges associated with your credit card. Unlike interest fees, which you only incur when you have an outstanding balance, these fees can pop up for various reasons.

For example, you might encounter an annual fee just for having the card, a balance transfer fee if you decide to shift debt from another account, or foreign transaction fees when making purchases while traveling internationally.

It is important to recognize those fees in order to minimize or avoid unnecessary charges. Follow our tips, and we hope you can save hundreds of dollars.

Annual Fees

Essentially, it’s the fee you pay each year for having that credit card. A lot of people really don’t like paying fees of any kind, but this one might actually be worth it.

Annual fees are pretty common with travel credit cards, which often come loaded with awesome perks like higher sign-up bonuses and better rewards than standard cashback cards.

To see if an annual fee makes sense for you, it’s all about doing a little math.

Think about how much you spend: will the rewards you earn each year make up for that fee? Can you snag more rewards than you would with a cashback card?

If you can, then don’t let the word “fee” freak you out!

But if paying an annual fee just isn’t your thing, that’s totally fine! There are plenty of fantastic credit cards out there that don’t charge an annual fee at all.

You’ve got options! You can pick a credit card that doesn’t charge an annual fee. Some of them even offer awesome perks, like rental car insurance, without charging you for it.

Finance Charges

When you carry a balance on your credit card instead of paying it off in full, the issuer charges you interest, which is also known as the annual percentage rate (APR).

The way your APR is determined can depend on a few things, like the interest rates that card offers and your credit history.

The best way to avoid those pesky finance charges is to pay off your balance in full and on time each month.

Balance Transfer Fee

Thinking about moving some debt from one credit card to another? That’s where the balance transfer fee comes in. Usually, this fee ranges from 3% to 5% of the amount you’re transferring.

While some cards offer enticing deals, like 0% interest on balance transfers for a year or more, it’s super important to crunch the numbers and see if those interest savings will outweigh the transfer fee.

So, before you jump in, make sure to check the fine print!

Foreign Transaction Fees

Have you ever been on vacation or shopped online from a different country and noticed some extra charges?

That’s likely due to foreign transaction fees, which some credit cards tack on for purchases made in foreign currencies.

These fees usually range from 1% to 3% of your total spend, and they can add up faster than you might think!

But if you want to dodge those charges, all you need to do is look for a credit card that doesn’t have foreign transaction fees.

Many travel cards are designed with this perk, letting you enjoy your adventures or online shopping sprees without worrying about extra costs!

Over-limit Fee

An over-limit fee is what you’ll be charged if your balance goes beyond your credit limit.

Fortunately, the Credit Card Act of 2009 has your back by preventing card issuers from automatically enrolling you in programs that would cover these fees.

Instead, you have the choice to opt in, which can help you avoid embarrassing moments at the checkout if you accidentally go over your limit.

If you decide to go this route, the best way to avoid that fee is to keep your balance comfortably below your limit.

If you want to have even more information about it, here is an article of CNBC on some common credit card fees and how to avoid them!

In case you want to learn more about credit cards, you can check out our post about credit card hacks and how to avoid them by clicking the button below.

Written by

Everaldo Santiago